The Washington Independent, an online news source, has been running a 3-part series on a new economic stimulus package being considered in Congress and one of their entries is Building Out of Economic Chaos, making the point that infrastructure stimulus is a necessary part of getting this country back on its feet.
Democratic leaders appear more and more confident they can win the fight over a large stimulus bill. Infrastructure funding — which could replace thousands of local jobs lost in the downturn — seems increasingly to be driving the debate.
“There is a backlog,” said Rep. James Oberstar (D-Minn.), chairman of the Transportation and Infrastructure Committee. “There is a demand. There is a hunger. There is a need to invest. Our cities are crying out.”
The lame-duck Bush Administration, composed of new Hoovers, blocked a House infrastructure spending bill in September. But Democrats are going to try again, riding the wave of a successful November election and armed with arguments that undermine the deniers:
“Infrastructure spending is never an effective means to create rapid stimulus,” the White House proclaimed in its veto threat.
Yet many state and local officials argue that a great number of projects could begin almost immediately. Corzine, for example, said that New Jersey has roughly $1.5 billion in projects ready to start within 90 days. Jerry E. Abramson, mayor of Louisville, said the city has $250 million in unfunded infrastructure initiatives set to go within 120 days. Nationwide, state transportation departments have more than 3,000 projects, totaling $17.9 billion, ready to launch within 90 days, according to a survey conducted by the American Assn. of State Highway and Transportation Officials.
In addition, many economists say the current recession will last long enough that the timeline criticism is irrelevant. “That argument has no force now,” Paul Krugman, the Nobel prize-winning economist, wrote in his Oct. 16 New York Times column, “since the chances that this slump will be over anytime soon are virtually nil. So let’s get those projects rolling.”
On that theme, economists point out that labor markets rebound from economic slumps far more slowly than other indicators. During the recession of 2001, for example, it took 30 months for unemployment to bottom out, according to John Irons, policy director at the Economic Policy Institute. Four years passed before employment rates rose above pre-recession levels, he added.
California High Speed Rail is just such a project that could begin very quickly with federal stimulus. Of course, we will not receive that money unless we pass Proposition 1A.
California has a clear choice on Tuesday. Either we slide deeper into recession and abandon tried and true solutions to revive our economy, or we pass Prop 1A and start the long road back to prosperity.
Your choice, California.